ABLE Act modifications advance in the Senate

The US Senate may soon hear two new bills that seek to build on a 2014 law that aims to make people with disabilities more economically self-sufficient.

Under the ABLE Act, signed by President Obama in December 2014, people with disabilities can set aside $14,000 annually, up to $100,000, into special tax-free savings accounts, without jeopardizing their eligibility for federal benefits programs such as Medicaid and Supplemental Security Income.

On March 27, 2016 the six original sponsors of the bill introduced three new measures to adjust the ABLE Act.

One of the proposed reforms, the ABLE Financial Planning Act would allow tax-free rollovers between funds in ABLE Acts, also known as Section 529A plans, and traditional Section 529 college saving plans.

The ABLE to Work Act would allow people with disabilities who are currently employed to put additional funds, beyond the $14,000 annual threshold, into their ABLE Accounts. This additional amount would be capped at the federal poverty line, which currently stands at $11,700 for a single person.

Both measures have been approved by the Senate Finance Committee, Disability Scoop reported on September 27.

The other bill, ABLE Age Adjustment Act, would expand the eligibility criteria for ABLE accounts. As written, the ABLE Act mandates that the person’s disability arise before the person turns age 26.  This measure would raise this threshold to 46.